A loss on the sale of machinery in the ordinary course of business should be presented in a statement of cash flows as a(n):
A) adjustment to reconcile net income to cash from operating activities.
B) operating activity.
C) investing activity.
D) noncash exchange.

Question

Quizplus · Accepted Answer

The loss on the sale of machinery in the ordinary course of business is included as an adjustment to reconcile net income to net cash provided by operating activities in the statement of cash flows. This is because the loss is included in the determination of net income but does not involve an outflow of cash.

A Loss on the Sale of Machinery in the Ordinary